Stock prices point up on European debt outlook

Stock prices look to open higher on Wall Street, despite weak consumer spending. Stock prices are being buoyed by hopes that Europe's debt crisis will ease.

ByDaniel Wagner, AP Business WriterJune 27, 2011

In this June 22, 2011 photo, traders gather at the post of specialist Stephen D'Agostino (foreground, second left) on the floor of the New York Stock Exchange. US futures suggested stock prices would move higher as optimism about Europe's debt crisis trumped a weak consumer spending report in the US.

Richard Drew/AP/File

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U.S. stock futures rose slightly before the opening bell Monday as encouraging signs from Europe overshadowed a report showing that American spent in May at the weakest pace in 20 months.

Traders were monitoring efforts by European nations to address the ongoing debt crisis there.

The U.S. government, meanwhile, said that spending by consumers decreased in April and May, after adjusting for inflation. They were the first such declines since January 2010.

In Europe, Greek lawmakers debated austerity measures that must pass before the country can receive another bailout to avoid defaulting on its debts.

European markets received a lift before the vote from news that French banks had agreed to accept slower repayment of Greece's debt, giving that nation more time to maneuver. French bondholders hold about $21.3 billion in Greek government debt.

Europe's debt problems have weighed on global markets in recent weeks, with major indices adjusting daily to the news about Greece's progress toward a second bailout.

If Greece defaults, the fear is, investors will lose faith in the financial strength of other nations that have borrowed heavily or hold billions in Greek debt. That might cause another financial crisis like the one in U.S. markets after the failure of investment bank Lehman Bros.

The Dow sank 1 percent on Friday, and the S&P 1.2 percent, erasing last week's gains for both indices. Broad markets have now fallen for seven of the past eight weeks as traders process a string of dismal economic data showing that the recovery is slowing. The Nasdaq fell 1.3 percent on Friday.

The S&P and the Dow both are down 7 percent since they hit their highs for the year on April 29. However, the Dow is up 3 percent this year, and the S&P 1 percent.

Futures of online job search service Monster Worldwide Inc. rose 3 percent after the company said it will launch a Facebook application to compete with the social network LinkedIn. LinkedIn shares surged after their initial public offering last month. They remain 55 percent higher than their initial price of $45.

After the market closes, athletic apparel maker Nike Inc. will report on its financial performance in the fiscal fourth quarter.